Difference Between MRP and MPS in Supply Chain: A Complete Guide
Difference Between MRP and MPS in Supply Chain: A Complete Guide
Blog Article
For productive production and stock management, there are two fundamental planning systems that are used: Material Requirements Planning (MRP) and Master Production Scheduling (MPS). While the two facilitate the manufacturing process, they have distinct functions and work at different levels of the planning structure.
Here, you will go into depth of how MRP and MPS differ, what they do, and how they support each other.
Demand: The Backbone of Planning
Now let's learn to demand the backbone of any planning system. Demand is of two types:
Independent Demand: It is demand that occurs directly from the customers. A sample would be a completed product such as a pen that had been ordered by a customer.
Dependent Demand: It is the demand for parts used to create the finished good. An example would be the pen cap, barrel, spring, and refill.
What is Master Production Scheduling (MPS)?
MPS is a master planning system for manufacturing that processes products with independent demand. It considers firm orders and sales orders to generate a master production schedule for products.
Main Features of MPS:
Order Management: Assists in handling orders by scheduling orders based on deadline and priority.
Capacity Planning: Verifies if the production resources (labour, equipment, material) can handle the schedule.
Time Horizon: Operates on a week or month-by-month basis.
Forecast Driven: Deploys service orders and sales forecast to plan production.
Analytics & Reports: Generates comprehensive reports on delivery status, inventory level, and planned production.
Example: A company that produces pens utilizes MPS for planning the number of pens to be made next week based on orders from the customers.
MRP handles dependent demand item planning, i.e., raw materials and parts. MRP makes sure the appropriate parts are on hand at the correct time for manufacturing.
Main most characteristics of MRP:
Bill of Materials (BOM): Enforces an entire list of component parts needed to create each finished product.
Lead Time Management: Compares ordering time and receipt of parts time.
Demand Forecasting: Utilizes history data and sales data to forecast raw material needs.
Daily Run: More frequent running of MRP (up to daily) is done to meet dynamic production needs.
Integration of MPS: MRP receives inputs from MPS to decide the quantities of materials required.
Illustration: After taking into consideration MPS schedule for pen, MRP will compute quantities of caps, barrels, and refills required and plan their purchase accordingly.
MPS and MRP Together
See MPS as the mind that determines what is to be produced and when, and MRP as the hands that determine how to make it possible. MPS initiates MRP, and MRP calculates the material and items required.
This coordination achieves:
- Production within time
- Maximum inventory
- Minimum production lag
- More customer satisfaction
In brief, the supply chain management difference between MRP and MPS lies in what they are about. While MPS is concerned with customer-driven top-level schedules of production, MRP ensures that all the parts and materials required for the same are available at the right time.
Employed collectively, these systems are a reliable and cost-effective manufacturing system. Ranging from MPS and MRP examples such as pens and their parts to real-time projections, these tools make productivity rise and costs decrease.
Whether you are running production in a plant or studying manufacturing systems, it is crucial to know MRP and MPS.
Frequently Asked Questions
What is the chief difference between MPS and MRP?
MPS schedules final products with independent demand, while MRP schedules materials required to manufacture them.
Is MPS necessary prior to MRP?
Yes, MPS is executed first to determine the production schedule, which MRP utilizes to make material requirements.
Can MRP exist without MPS?
Yes, but it won't be effective. MRP relies on the demand created by MPS.
How frequently do MPS and MRP execute?
MPS operates generally on a weekly basis, while MRP operates on a day or more frequent schedule depending on inventory size and volatility.
What is a good example of MPS and MRP?
For the production of pens, pen is an MPS item, while cap, barrel, and refill are MRP items.
How is marked price distinct from MRP?
MRP is the maximum retail price printed on a product. Market price can be higher, with later discounts being offered, but not above MRP.
What is MRP1 and MRP2?
These are alternate perspectives in ERP systems such as SAP:
MRP1 is all about planning data (procurement type, lot size).
It has scheduling and lead time data. Report this page